Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Whether fees paid to a surrogate to carry the embryo and deliver the baby for the biological parents qualify as eligible medical expenses of the biological parents for the purposes of the medical expenses tax credit ("METC").
Position: No.
Reasons: Such fees are not described in subsection 118.2(2). The decision in Zieber v the Queen, 2008 DTC 4175 (TCC) is not a precedent as it was under the informal procedure. Further, that case did not address amounts paid to the surrogate to carry and deliver the baby.
XXXXXXXXXX
2010-039169
Chrys Tzortzis, CA
February 10, 2011
Dear XXXXXXXXXX :
Re: Surrogacy fees
We are writing in reply to your fax dated November 10, 2010, which was addressed to the Sudbury Tax Centre and forwarded to us. You inquire whether fees paid to a surrogate to carry the embryo and deliver the baby for the biological parents qualify as eligible medical expenses of the biological parents for the purposes of the medical expenses tax credit ("METC").
Written confirmation of the tax consequences that apply to a particular fact situation is given by this Directorate only in the context of an advanced income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. This Information Circular and other Canada Revenue Agency publications can be accessed on the CRA Web site at www.cra-arc.gc.ca. However, we are prepared to provide the following general comments, which may be of assistance.
Medical expenses which are eligible for the METC are limited to those described in subsection 118.2(2) of the Income Tax Act ("Act"). If a particular expenditure is not described as an eligible medical expense in subsection 118.2(2) of the Act, or if the conditions under which the expenditure would qualify are not met, the expenditure does not qualify for purposes of the METC, even though the expenditure may have been incurred for medical reasons. In our view, fees paid to a surrogate to carry the embryo and deliver the baby for the biological parents do not qualify as eligible medical expenses of the biological parents for the purposes of the METC as such fees are not described in subsection 118.2(2) of the Act.
Information on medical expenses may be found in Interpretation Bulletin IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction which is posted on the CRA Web site.
We trust that these comments will be of assistance.
Yours truly,
G. Moore
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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